Written Commentary
TODAY—COMMITMENT OF TRADERS
Overnight trade has SRW Wheat unchanged, HRW up 1; HRS Wheat up 1, Corn is down 1 cent; Soybeans up 3; Soymeal up $1.50, and Soyoil unchanged points.
For the week, SRW Wheat prices are up roughly 15 cents; HRW up 17; HRS up 12; Corn is up 17 cents; Soybeans up 40;
Soymeal up $7.00, and; Soyoil up 185 points. Crushing margins are down 5 cents at $0.93; Oil share is up 1% at 35%.
Chinese Ag futures (January) settled up 28 yuan in soybeans, down 10 in Corn, down 11 in Soymeal, up 124 in Soyoil, and up 70 in Palm Oil.
Malaysian palm oil prices were up 61 ringgit at 2,741 (basis November) at midsession following rival veg oils.
The 6 to 10 day forecast for the Midwest have turned mixed with the models. The European model sees little rainfall in the western part of the region with only light amounts in the rest of the Midwest. The GFS favors light to moderate rainfall for parts of MN and IA and most of MO as well into the Ohio River Valley with light amounts elsewhere. Temps begin to fall to below average in the western Midwest and average in the east for most of next week.
The 11 to 16 day forecast for the Midwest has a bit less than average rainfall for the region and below average temps. Both models are indicating temps dipping close to 32 degrees for parts of MN, IA, and the eastern Dakotas around Sep 8th.
The player sheet had funds net buyers of 10,000 contracts of SRW Wheat; bought 10,000 Corn; bought 20,000 Soybeans; net bought 4,000 lots of Soymeal, and; bought 6,000 Soyoil.
We estimate Managed Money net long 17,000 contracts of SRW Wheat; short 56,000 Corn; net long 142,000 Soybeans; net long 10,000 lots of Soymeal, and; long 69,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures down roughly 6,400 contracts; HRW Wheat down 2,400; Corn down 15,500; Soybeans up 4,500 contracts; Soymeal down 4,500 lots, and; Soyoil up 2,400.
There were no changes in registrations—Registrations total 95 contracts for SRW Wheat; ZERO Oats; Corn ZERO; Soybeans 23; Soyoil 2,632 lots; Soymeal 511; Rice ZERO; HRW Wheat 47, and; HRS 1,387.
Tender Activity—Jordan seeks 120,000t optional-origin wheat—
For the week ended August 20th, U.S. All Wheat sales are running 7% ahead of a year ago, shipments up 3% with the USDA forecasting a 1% increase on the year
For the week ended August 20th, U.S. Corn sales are running 10% behind a year ago, shipments 13% behind with the USDA forecasting a 13% decline.
For the week ended August 20th, U.S. Soybean sales are running 2% behind a year ago, shipments down 4% with the USDA forecasting a 6% decline on the year
Brazilian government has decided to remove temporarily import tariffs on rice, corn and soybeans, an Agriculture Ministry official said; the move aims at fighting inflation, as prices for the three products have risen recently.
China made its largest weekly U.S. beef purchases on record last week, followed by its biggest U.S. corn deals in almost a month this week, according to U.S. Department of Agriculture data released on Thursday; the USDA, in its weekly export sales report, said China bought a net 3,315 tons of U.S. beef in the week ended Aug. 20, the largest weekly buy in records dating back to 1999. China also bought 11,216 tons of U.S. pork last week, the most in a month.
Chinese purchases in the first half of this year totaled just $7.274 billion, according to U.S. Census Bureau trade data, well below the $36.5 billion in annual purchases promised in the trade deal.
The U.S. agricultural sector was spared a direct hit from Hurricane Laura on Thursday as the storm veered west of grain export terminals in New Orleans and missed many fields of unharvested cotton and sugar, according to meteorologists and industry sources; the storm’s rains, however, are also projected to miss many of the driest areas of the U.S. Midwest corn and soybean belt that need them, including key producers Iowa and Nebraska.
The International Grains Council (IGC) on Thursday raised its forecast for global corn (maize) production in the 2020/21 season reflecting an improved outlook for the U.S. crop.
In its monthly update, the inter-governmental body increased its global corn crop forecast by 2 million tons to a record 1.166 billion tons; the U.S. corn crop was seen at 384.2 million tons, up from a previous projection of 380.8 million but below the U.S. Department of Agriculture’s forecast earlier this month of a record 388.1 million ton lower forecasts for corn crops in France (14.4 million tons from 15.2 million) and Russia (14.5 million tons from 15.5 million) partially offset the upward revision for the U.S.
The IGC also raised its forecast for 2020/21 world wheat production by 1 million tons to 763 million tons; the increase was driven by upward revisions for Russia (79.9 million tons from 78 million) and Australia (27.5 million tons from 26.2 million); the impact was partly offset by downward revisions for France (31 million tons from 32.6 million) and Romania (5.6 million tons from 7.8 million).
The IGC also raised its forecast for global soybean production in 2020/21 to 373 million tons from a previous projection of 365 million, largely because of an upgraded outlook for the U.S. crop.
North America’s hog farmers face prolonged pain beyond the COVID-19 pandemic that has interrupted packing plants, as a pig glut in the United States holds prices low and pressures producers to downsize; many North American hogs had nowhere to go in spring as slaughter plants suspended production due to workers becoming infected with the novel coronavirus.
Saskatchewan crop report: Warm, dry conditions continued this week which allowed crop development and maturation to progress and farmers in all regions of the province to make some harvest headway; fifteen per cent of the crop is combined, up from four per cent last week and ahead of the five-year average of 12 per cent (2015-2019) for this time of year; an additional 16 per cent of the crop is now swathed or ready to straight-cut, slightly behind the five-year average (2015-2019) of 17 per cent.
China’s corn prices have started to cool off as demand at government corn auctions has started to ease; only 96% of corn offered in Inner Mongolia was sold and prices have fallen by CNY66 a metric ton, says analyst at StoneX; he notes that downstream products have underperformed and starch prices have fallen sharply recently and this has pushed processors in Shandong back into negative margins
Argentina’s 2020/21 wheat yields could fall as much as 50% in northern and central parts of the country’s farm belt due to dryness exacerbated by unusually strong frosts and crop-eating pests, the Buenos Aires Grains Exchange said; the estimated 6.5 million hectares that were planted with wheat this season was reduced from an original forecast of 6.8 million hectares as growers grew nervous about the dryness; however the heart of Argentina’s wheat belt, in the southern part of the bread-basket province of Buenos Aires, had gotten better moisture in recent days.
Argentine barley shipments have started streaming toward China after a three-year lull as a trade conflict between Asia’s top buyer and main supplier Australia changes global supply flows of the grain used for livestock feed and beer; Argentina is on track to send at least 250,000 tons this year and a record 380,000 tons in 2021; that is up from virtually nothing in 2019.
A labor union representing Argentine grains port workers said that it suspended a scheduled strike over wages after the government called for talks between the workers and their companies.
The European Commission on cut its 2020/21 forecast for all cereals in the European Union’s 27 countries with usable common wheat production now expected at 113.5 million tons, down from 116.6 million estimated a month ago.
The condition of French grain maize remained unchanged in the week to Aug. 24, with 62% of crops rated good or excellent, the FranceAgriMer farm office said; the maize rating had fallen sharply in the past month as drought and heatwaves have stressed crops.
European wheat prices rose more than 1% to hit a five-week on Thursday, supported by a rally in Chicago, technical buying and short-covering as bullish sentiment is mounting; benchmark December milling wheat was up 1.2% to 186.25 euros a ton, a price unseen since July 24.
Indonesia will keep its export tax for crude palm oil (CPO) at zero for a sixth straight month in September, a document from the country’s trade ministry showed.
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